John Murphy Reports

There’s been a piece of land for sale for a number of years at the northeast corner of Peony Lane and Schmidt Lake Road in NW Plymouth just across from the new Wayzata High School and within one mile of Providence Academy.  Most of the land is wet, but clearly there is enough to develop a neighborhood.   Pulte has broken ground on a new neighborhood called Elm Creek Highlands.   There isn’t a lot of information available yet.   When I called the company they said pricing hasn’t been set yet, but they plan to have homes available by March 2010 – I’m sure in time for the Spring Parade of Homes Tour.  If I had to guess, I would imagine they will have prices between $550,000 – $725,000.

There are a number of projects underway in NW Plymouth and SW Maple Grove because both of those areas are in the highly sought after Wayzata School District.   These new construction neighborhoods are going to continue to put heavy pricing pressure on existing home sellers who are trying to unload their older houses.

Given that the U.S. Government just allowed for a billion dollar plus tax refund for many of the national homebuilders, Pulte’s pockets should be plenty deep at this point to be able to weather any additional price competition either from the local builders or Lennar which is very active in NW Plymouth and SW Maple Grove.

One could look at Pulte’s move a couple of ways.  Perhaps this is a sign that they see an improving marketplace in the northwest suburbs of the Twin Cities and so they are moving forward in a big way to lead the market out of this morass.  Or, perhaps another way to look at it is this was a highly visible piece of land that would be great for any builder to develop regardless of the soft market conditions because they want to have a foothold in the Wayzata School District.

Pulte CEO Richard Dugass was just quoted by Market Watch that things remain choppy and it’s difficult for move up buyers to be able to sell their existing homes in order to move in to a new Pulte home.